On one of my recent visits to my parents, I had to do some IT administration - as I often do as the person who supplied them with their IT equipment.
My key task this time was to install some additional RAM. The machine had just 128MB, which although technically OK for Windows XP is not quite as useful as it could be, especially once you get one or two applications open.
I doubled the RAM up to 256MB and the results and improvement in performance were dramatic, especially considering the cost of the upgrade was fairly modest.
The relationship between RAM and performance is understandable once you know how your computer uses it's memory and hardware. Nearly all OS make use of the hard drive as a secondary memory store (swap space) to make better use of the faster physical RAM. But the problem is that the use of the hard disk is slow enough to cause slow responses in your machine. The more physical RAM you have, the better the response.